Boeing makes 787s faster; could boost fourth-quarter deliveries

Alwyn Scott

3 Min Read

The Boeing 787 Dreamliner Everett 787 Factory is shown in this April 29, 2013 photo released on May 9, 2013. Gail Hanusa/Boeing/Handout via Reuters

NEW YORK (Reuters) - Boeing Co (BA.N) said on Thursday it has succeeded in getting its factories to churn out 787 Dreamliners at a faster pace this week, a change that came sooner than expected and positions the plane maker to possibly deliver more of the high-tech jet than forecast.

Deliveries of the high-tech jet have not yet resumed since they were suspended in January after two batteries overheated, Boeing said. However, its forecast of delivering more than 60 Dreamliners by year-end has not changed.

Analysts said that by reaching the new rate of seven Dreamliners a month in May, rather than mid-year, Boeing could easily exceed that target.

“I think you could see a very strong fourth quarter,” in terms of deliveries, said Ken Herbert, an analyst at Imperial Capital in San Francisco.

“They’ve given themselves a lot of cushion” to meet the target of more than 60.

He reckoned that by taking seven jets a month as the average for the year, Boeing could build 84 Dreamliners this year. But not all of the jets produced in 2013 will be delivered, since each plane requires time for test flights.

Also, he noted, since early production jets are less profitable than later ones, more 787 deliveries would mean lower profit margins, so Boeing may not deliver all of the 787s it produces.

Boeing said the first plane at the new rate rolled out of the factory on Monday night, up from five a month previously.

Boeing is working to speed up the assembly line to produce 10 Dreamliners a month by year-end, spokesman Scott Lefeber said. Boeing typically does not announce precise dates for production shifts.

“We remain on track to increase our production rate to 10 per month by year-end, with first deliveries occurring at this rate in early 2014,” Lefeber said.

Boeing is doing construction on the main production line in Everett, Washington and has a “surge” line at that factory for additional production. Lefeber said. The second assembly line for the 787 is in North Charleston, South Carolina.

Boeing delivered just one Dreamliner this year before deliveries halted on January 16, when regulators grounded the worldwide fleet of 50 planes following two separate incidents in which lithium-ion batteries overheated on the planes.

Regulators last month approved a redesigned battery system that adds more protection against fire. Boeing is retrofitting the existing jets, and airlines are putting them back into service.